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Technology Stocks : INTCW

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To: kolo55 who wrote (18)1/9/1997 5:24:00 PM
From: kenneth mcmahon   of 78
 
Paul,

Thanks. I know about employee option grants (iso and non-qual). I also realize they are different from warrants. I simply tried to use them as an example of how exercising warrants may be handled since I did not remember the terms used by the IRS. I do now. Warrants may be classified as statutory (sp?) or non-statutory. Statutory warrants are "treated like" qualified (or ISO) options in that you pay when you sell the stock (the basis is handled the way you described). Non-statutory warrants are "treated like" non-qual options in that you pay taxes on the gains of the warrants at the time or exercise (so there appears to be no advantage to exercising if classified this way).

I did not know how the INTCW's were classified so I asked if people were sure on how they were handled. This is one of those things the IRS does to confuse our lives.

Ken
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